Teppco to buy Wyoming gas pipeline system from Alberta Energy

Sep 11, 2001 02:00 AM

Houston-based Teppco Partners has struck a deal to buy a natural gas pipeline system in Wyoming from Alberta Energy for $ 360 mm, the companies said. Teppco, a limited partnership that owns and operates oil and natural gas pipelines, said it had signed a deal to acquire Jonah Gas Gathering, a subsidiary of Alberta Energy. The Jonah system is about 300 miles of pipeline ranging in size from 4 to 20 inches in diameter, in the Green River Basin in south-western Wyoming.
Natural gas transported on the Jonah System is processed by others and delivered to several interstate pipeline systems in the area that provide access to a number of West Coast, Rocky Mountain and Midwest markets.
"The revenues from this system are generated under long-term, fee-based contracts with area producers," William Thacker, chairman and CEO of Teppco, said. Teppco said it expects first full-year revenue from the Jonah System at about $ 53 mm and operating earnings of $ 45 mm.

As a result of the positive effect of the Jonah System, the partnership said it plans to increase its distribution by at least 15 cents per unit annually, effective with the distribution to be declared in mid-October. Under the proposed deal, Teppco will acquire about 300 miles of pipeline and five compressor stations. Capacity is 450 mm cfpd of gas.
Fifty miles of new 20-inch diameter pipeline and additional compression facilities are under construction, which would increase capacity to more than 700 mm cfpd of gas. The additions will be placed in service in early 2002, the company said. Teppco will spend $ 25 mm over the purchase price on the expansion.
The purchase is expected to be completed by month's end. The assets will be operated by Duke Energy Field Services under agreements with Teppco.

Teppco owns and operates one of the nation's largest common-carrier pipelines of refined petroleum products and LPGs. It also owns a 50 % interest in Seaway Crude Pipeline, an interest in the Rancho and Basin Pipelines. Texas Eastern ProductsPipeline, a subsidiary of Duke Energy Field Services, is the general partner of Teppco Partners.
Alberta Energy acquired Jonah Gas Gathering when it bought Denver-based McMurry Oil in June 2000 for $ 581.3 mm. Alberta Energy said it plans to spend $ 898 mm by the end of next year to raise its oil output from western Canada and Ecuador.

Source: Houston Chronicle - Knigt Ridder/Tribune Business News
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